Few minority-owned businesses got the relief loans they requested
Black and Latino business owners struggle to get pandemic help under the Paycheque Protection Program and other federal aid efforts, a new investigation has revealed, and many say they are on the verge of shutting down for good.
The survey, conducted by the Global Strategy Group for two equal rights organizations, Change color and UnidosUS, included interviews with 500 business owners and 1,200 workers from April 30 through Monday. Only 12% of homeowners who turned to the Small Business Administration for help – most of them seeking loans under the $ 650 billion paycheck program – said they received what they wanted. asked, while 26% said they received only a fraction of what they received. demand. Almost half of all homeowners said they plan to shut down permanently within the next six months.
By comparison, in a Census Bureau survey of small businesses from April 26 to May 2, three-quarters said they had applied for a loan and 38% said they had received one.
Rashad Robinson, president of Color of Change, said the new survey showed that “if we don’t get policies to protect these communities, we will lose a generation of black and brown businesses, which will have profound impacts on the community. economy of our whole country. . “
Two-thirds of those surveyed requested loans of less than $ 50,000 under the government’s assistance program. Almost half said they had to lay off at least some employees.
The results suggest that the historically weak relationships that minority business owners have with banks prevent them from tapping into the aid program, which provides loans that become grants if borrowers spend the money to pay employees and rent and utility bills. Many banks only reviewed requests from existing customers; some, like Bank of America, even repressed people who had opened credit cards through other lenders.
The program was the first time black and Latino business owners had applied for a bank loan.
Equal rights advocates and some lawmakers are pushing for more help for minority-owned business owners integrated into the government’s response to the coronavirus pandemic, and the second round of funding for the program. loans has earmarked $ 60 billion for small rural banks and nonprofit lenders, which often do more work in minority communities than the big banks.
Mr Robinson said his group was pushing lawmakers to find other ways to pass aid on to business owners, such as direct payments to company employees through payroll processors or other means.